It is sad- next shoe likely to drop!

[Sarge]

I say the prior post about houses values dropping 50%.

Equity loans are drying up and here is what is likely coming next.

http://www.abcnews.go.com/Business/Economy/story?id=4401032

Note the average 10K credit card debt.

 

[acptulsa]

They're just following the government's example.

 

[ToryNotion]

Equity has dropped 50%ish but the drop in home prices (so far) is less severe. Somewhere in the 20% range average nationally I think but maybe trending down lower.

 

[ToryNotion]

So the article says we have a lot of personal credit card debt but this is not news. What 'shock to the system' is going to cause this to become a crisis? Maybe if the card issuers bumped the interest rates up or if un-employment really jumped and there were more defaults?

 

[jason43]

I tell people I don't have a credit card and they look at me like I told them I have a third hand growing out of my back.

The only debt I have is my house... and I plan on paying it off early.

 

[Dr.3D]

So the article says we have a lot of personal credit card debt but this is not news. What 'shock to the system' is going to cause this to become a crisis? Maybe if the card issuers bumped the interest rates up or if un-employment really jumped and there were more defaults?

A recession would cause more unemployment. This is turn would cause more defaults. The end result may be a decent into depression.

 

[jason43]

So the article says we have a lot of personal credit card debt but this is not news. What 'shock to the system' is going to cause this to become a crisis? Maybe if the card issuers bumped the interest rates up or if un-employment really jumped and there were more defaults?

Yes, the same people that cont pay their mortgages can't pay their credit cards... because they never should have been able to get them in the first place.

Our personal debt issues, houses, cars, credit cards, etc are one big deck of cards. Pull one out and they all start going down.

People dont actually buy anything anymore, they finance, and when employment goes down, all those payment become impossible, especially with high mortgages.

 

[Cowlesy]

No, the next shoe to drop is when unemployment really kicks into gear, all the college grads up to their eyeballs in debt aren't going to be able pay it off and those defaults will go to the moon.

More bad news banks, more good news for my investment in UltraShort Financials (SKF).

Our country is so horribly leveraged...ugh...

 

[Sarge]

The trend is starting.

Note in the article the jump in filings.

"The American Bankruptcy Institute reports personal bankruptcy filings in February rose more than 15 percent compared with January.

"What's amazing about the rise in bankruptcy filings are that they've gone up in the face of rules that make filing for bankruptcy almost impossible for many Americans," said personal financial consultant Gary Shatsky. "

We shall soon know the jump again in March. Just my opinion with the big increase in foreclosures.

I agree with the post, that the house values are down 20%, but the equity down 50% is what will compound the problems.

Another valid point was made about auto loans. I just read an article that they can't even find enough repo people to go pick up cars that are going into default.

 

[jason43]

Debt is going to be our downfall because you eventually have to pay it off.

 

[Sarge]

Here is an article about auto defaults rising. The repo guy can't even get to all of them in a day.

http://www.sentinelsource.com/main.asp?SectionID=31&SubSectionID=37&ArticleID=180604

Note how many are expensive cars and you can still end up owing money after they sell it.

 

[Apparition]

Big man, pig man, ha-ha charade you are.
You well heeled big wheel, ha-ha charade you are.
And when your hand is on your heart,
You're nearly a good laugh,
Almost a joker,
With your head down in the pig pen,
Saying "Keep on digging."
Pig stain on your fat chin.
What do you hope to find?
When you're down in the pig mine
You're nearly a laugh,
You're nearly a laugh
But you're really a cry.

 

[TER]

Big man, pig man, ha-ha charade you are.
You well heeled big wheel, ha-ha charade you are.
And when your hand is on your heart,
You're nearly a good laugh,
Almost a joker,
With your head down in the pig pen,
Saying "Keep on digging."
Pig stain on your fat chin.
What do you hope to find?
When you're down in the pig mine
You're nearly a laugh,
You're nearly a laugh
But you're really a cry.

American sheeple:"Baaa Baaa"
American bureaucrats: "Ruff, ruff"
Corporate elites:"snork, snork, squeal, snork"

 

[Dr.3D]

Big man, pig man, ha-ha charade you are.
You well heeled big wheel, ha-ha charade you are.
And when your hand is on your heart,
You're nearly a good laugh,
Almost a joker,
With your head down in the pig pen,
Saying "Keep on digging."
Pig stain on your fat chin.
What do you hope to find?
When you're down in the pig mine
You're nearly a laugh,
You're nearly a laugh
But you're really a cry.

I love Pink Floyd.

 

[acptulsa]

And when I tell you the name of the game, boy
We call it riding the gravy train.

 

[JSutter]

I tell people I don't have a credit card and they look at me like I told them I have a third hand growing out of my back.

Same here. I have 2 debit cards and that's it. I went to buy some new furniture a few months back and told the manager I was paying cash and wanted the best deal he could give me. He says he can't drop prices but will offer me interest free financing. I explained again I didn't need financing I had cash. He tries to give me some speech about keeping my cash and financing the furniture. I just looked at him and left.

 

[WilliamC]

I tell people I don't have a credit card and they look at me like I told them I have a third hand growing out of my back.

The only debt I have is my house... and I plan on paying it off early.

Now there's a man with some good old fashion common sense!

My wife and I are less than 6 years into a 30 year mortgage and already have over 30% of the principle paid off, and we purchased with only 5% down!

We are currently a comfortable 3 months ahead on our mortgage simply by trying to send out a payment as soon as possible after getting the latest statement.

Sometime in the next 5 to 7 years (assuming we are able to continue our current rate of overpayment of principle or even increase it some) we will have the house paid off and that's the end of our borrowing forever.

Heck we even paid off a zero percent car loan over 1 year early just to be rid of the damn thing.

It just changes the way I look at life knowing I don't owe anyone anything and, worst come to worst, I just need to earn enough to meet the monthly expenses of food, utilities, cloths, and transportation.

 

[WilliamC]

And when I tell you the name of the game, boy
We call it riding the gravy train.

Oh by the way, which one's Pink?

Ok, I've laid it out on the forum before, but here it is again.

"This is where...we came in"

Anyone? Anyone?

 

[RonPaul_SantaMonica]

Good job sir. I bought my car in cash for the same reason. Do not want an axe over my head all the time.

You are in a minority though

Now there's a man with some good old fashion common sense!

My wife and I are less than 6 years into a 30 year mortgage and already have over 30% of the principle paid off, and we purchased with only 5% down!

We are currently a comfortable 3 months ahead on our mortgage simply by trying to send out a payment as soon as possible after getting the latest statement.

Sometime in the next 5 to 7 years (assuming we are able to continue our current rate of overpayment of principle or even increase it some) we will have the house paid off and that's the end of our borrowing forever.

Heck we even paid off a zero percent car loan over 1 year early just to be rid of the damn thing.

It just changes the way I look at life knowing I don't owe anyone anything and, worst come to worst, I just need to earn enough to meet the monthly expenses of food, utilities, cloths, and transportation.

 

[acptulsa]

I, too, lack credit cards.

It's against my principles to pay interest. I'm just not interested in doing it.

I'm sorry, was there a one pun limit?